JGBs extend selloff as hawkish BOJ board member calls for faster-paced rate hikes
TLT•Longer-dated yields rise on debt and spending concerns
JGB yields are on the rise along with their global peers, reflecting investor angst over inflation and government debt levels that stand to inflict fresh pain on consumers and businesses.
Japan's 10-year yield JP10YTN=JBTC rose to 3.01% on Wednesday, after hitting 3% for the first time since 1996 in the previous session. Yields move inversely to bond prices.
Under Prime Minister Sanae Takaichi's aggressive spending plans, Japan may boost sales of two- and five-year bonds, and that adds upward pressure on the 10-year bond yield, said Takashi Fujiwara, chief fund manager at Resona Asset Management's fixed income investment division.
Budget requests from ministries and agencies for fiscal 2027 are expected to reach 140 trillion yen ($874 billion), far beyond last year's all-time high of 122.3 trillion yen.
Inadome expects the selloff of JGBs to continue throughout the year, with the 10-year bond yield rising to 3.2% in October, meaning the yield would double since Takaichi became prime minister in October last year.
